No Space For Fundamental Changes To Austerity Package, Says Fiala

The government plans to raise corporation tax, property taxes, and excise tax on tobacco, alcohol, and gambling. Photo credit: Freepik.

Prague, May 14 (CTK) – There is no space for fundamental changes in the government’s austerity package announced last week, Prime Minister Petr Fiala (ODS) said on the Questions of Vaclav Moravec debate programme on Czech Television last night.

The cabinet will not yield to any pressure, he added, and may only make some adjustments in the case of shortcomings in the proposals or obvious errors.

The cabinet of Fiala’s ODS, the Christian Democrats (KDU-CSL), TOP 09, Mayors and Independents (STAN) and Pirates last week presented its austerity package of 58 separate measures, which Fiala said is expected to reduce the state budget deficit by CZK 94 billion next year.

The government plans to raise corporation tax, property taxes, and excise tax on tobacco, alcohol, and gambling. It will re-introduce sickness insurance for employees and raise social insurance payments for sole traders and the self-employed. The government says the main aim is to reduce the public deficit through savings, especially by cutting state subsidies.

Fiala dismissed the idea that any changes could be made to the major elements of the package. “We will not give in to any pressure,” he told Czech Television, adding that the same would apply in the case of strikes and protests.

Fiala admitted only that the cabinet could correct imperfections and obvious mistakes. “But I cannot say that we would give up the measures as we have set them up. We need to look at them as a whole,” the prime minister said.

He rejected criticism from the trade unions, saying that the cabinet is engaged in a constant dialogue with representatives of employees, noting the upcoming meeting of the Tripartite Council on Monday.

Fiala said the cabinet would not give up, for example, the planned cancellation of tax exemptions for some employee benefits, even if the employees and employers agreed on them.

“We will not give in on individual issues to the pressure that will come from many sides. A lot of people have got used to the fact that we have a subsidy economy, they live on subsidies,” he said, adding that it was not possible to continue to have a tax system full of exemptions.

“We cannot do it, it is opaque, it is bad, and that is why we have adjusted this in a sensible and socially sensitive way,” he said.

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